Deal to Acquire Alpha Red Falls Through

Deal to Acquire Alpha Red Falls Through
Joanne Cachapero and Slav Kandyba
TEMPE, Ariz. — The executive vice president of CWIE Holding Co. Inc, owner of payment processor CCBill, confirmed to XBIZ Friday that a deal to acquire the assets of Houston-based Web hosting provider Alpha Red Inc. didn't materialize.

Having announced the acquisition on Monday, it was not immediately unclear whether a lawsuit filed by the Washington state Attorney General's Office on Sept. 16 naming Alpha Red Inc.'s president James Reed McCreary IV may have led to the deal's demise.

In a statement, CWIE stated that “the purchase of Alpha Red’s assets could not be consummated notwithstanding considerable effort.”

When reached by XBIZ on Friday, CWIE Executive Vice President Thomas A. Fischer didn't elaborate, other than to say that, “the purchase of the assets didn’t go through."

In the lawsuit, Washington state's attorney general alleges that McCreary's Branch Software Inc. firm targeted Windows users via Messenger Service-type pop-ups that warn users that their registry has been corrupted. Users were then prompted to download scan software, which eventually lead to a purchase offer for software to “fix” errors detected in the scan.

The lawsuit asks the King County Superior Court to impose a permanent injunction against McCreary, Branch and Alpha Red. It also seeks damages and civil penalties for violations of the Computer Spyware Act and for unfair business practices.

As of Friday afternoon, AlphaRed.com’s “contact us” page no longer had McCreary's photo. His phone and email contacts, which had been there earlier in the week, were also removed. Repeated attempts to reach Alpha Red were unsuccessful.

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